Disabled Children and Your Estate Plan—What’s Best?
For the parents of children with special needs, estate planning is of supreme importance. Without proper estate planning, a disabled child who is unable to live independently may be left extraordinarily vulnerable. Below are some of the more common legal considerations for parents of children with special needs.
First, select a guardian. A guardian is necessary if your child has not reached the age of majority or has been adjudged incompetent. In either situation, parents should carefully select the person or institution that will be able to best care for their child. If parents do not make this designation, they suffer the possibility that the court will select a person or institution that the parents would not have selected.
If you are worried that an inheritance will negatively impact your child’s eligibility to receive needs-based government benefits, consider setting up a special or supplemental needs trust. These trusts allow parents (or any third party) to transfer assets to their child (or other beneficiary) with special needs without jeopardizing the child’s ability to receive needs-based government benefits. This is primarily because the inheritance is owned by the trust and not directly owned by the beneficiary.
If you plan to set up a special or supplemental needs trust, begin by calculating how much money will be needed to provide the desired level of care for the expected duration of his or her life. Be sure to factor in your child’s anticipated government benefits and provide for emergencies.
If you do not have the resources or are otherwise unwilling to set up a special or supplemental needs trust, you may wish to disinherit the child. If you leave your child out of your will completely, he or she will presumably continue to receive government benefits. Consult an experienced estate planning attorney to discuss the best options for you and your child.